Investors in Chinese property stocks have been a sceptical bunch. No amount of reassurance from policymakers could stem slides of more than 70 per cent in the shares of real estate groups. On Monday, that all changed.
The sector rallied in response to liquidity-boosting measures by Chinese regulators. But the package, while helpful for short-term financing, is unlikely to bring an end to the sector’s woes. Investor sentiment has weakened too badly, as rising rainy-day savings demonstrate.
Shares of Country Garden, China’s largest property group, rose more than 40 per cent on Monday. Local peers Logan Group and KWG Group jumped more than 30 per cent. Battered real estate bonds, many of which were down to below 10 cents on the dollar, more than doubled.
